RES 24-74THE CITY OF ELK RIVER, MINNESOTA
RESOLUTION NO.24-74
RESOLUTION APPROVING A SUBORDINATION OF THE
REGULATORY AGREEMENT RELATED TO CONDUIT BONDS ISSUED FOR
THE DOVE TREE APARTMENTS PROJECT
WHEREAS, the City of Elk River, Minnesota (the "City") issued its Multifamily Housing
Revenue Bonds (Dove Tree Apartments Project), Series 2010 (the "Bonds"), in the original aggregate
principal amount of $3,485,000 and its Subordinate Multifamily Housing Revenue Note (Dove Tree
Apartments Project), Series 2010 in the original aggregate principal amount of $2,856,000 (the "Note"
and together with the Bonds, the "Obligations"), the proceeds of which were loaned to Elk River Leased
Housing Associates III, Limited Partnership, a Minnesota limited partnership (the "Borrower") for the
purposes of financing the acquisition and renovation of a 68-unit multifamily rental housing development
located at 1105 Lions Park Drive in the City (the "Project"); and
WHEREAS, the Bonds were issued by the City pursuant to an Indenture of Trust, dated as of
October 1, 2010 (the "Indenture"), between the Issuer and U.S. Bank National Association, as trustee (the
"Trustee") and the Note was sold to U.S. Bank National Association, a national banking association (the
"Subordinate Lender") and issued pursuant to a Loan Agreement, dated as of October 1, 2010, between
the City and the Borrower. The Obligations were issued in accordance with Minnesota Statutes, Chapter
462C, as amended (the "Act"); and
WHEREAS, the Issuer, the Subordinate Lender, and the Borrower entered into a Regulatory
Agreement (Subordinate Note), dated as of October 28, 2010, and the Issuer, the Trustee, and the
Borrower entered into a Regulatory Agreement (together, the "Regulatory Agreements"), dated as of
October 28, 2010, which set forth the terms of the Borrower's compliance with the Act and Section
142(d) of the Internal Revenue Code of 1986, as amended (the "Code"), and applicable Treasury
Regulations promulgated thereunder; and
WHEREAS, the Obligations have been paid off in full; and
WHEREAS, the Borrower has determined to sell the Project to Elk River Prop I LLC, a
Minnesota limited liability company and has obtained financing (the "Mortgage Loan") from NorthMarq
Capital Finance L.L.0 (the "New Lender"), which will be secured by a Multifamily Mortgage,
Assignment of Lease and Rents, Security Agreement and Fixture Filing (the "Security Instrument") from
the Borrower to the Lender and insured by Fannie Mae ("Fannie Mae"); and
WHEREAS, as a condition to receiving financing from the New Lender, Fannie has required that
the Regulatory Agreements be subordinated to the lien, covenants, and enforcement of the Security
Instrument; and
WHEREAS, there has been presented to the City Council two Subordination Agreements (the
"Subordination Agreements") proposed to be entered into between the City, the New Lender and the
Borrower, pursuant to which the City will agree to subordinate the Regulatory Agreements to the Security
Instrument.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River, that:
436069v1 MERC125-290
1. The City Council hereby approves the subordination of the Regulatory Agreements to the
Security Instrument, pursuant to the terms of the Subordination Agreements.
2. The Subordination Agreements presented to the City Council and on file with the City Clerk
is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction
and that are approved by the Mayor and City Administrator; provided that execution of such document by
such officials shall be conclusive evidence of approval.
3. The Mayor and City, Administrator are hereby authorized to execute the Amendment to
Regulatory Agreement on behalf of the City and to carry out on behalf of the City the City's obligations
thereunder.
Adopted by the City Council of the City of Elk River, Minnesota this 16' day of December,
2024.
4ayo
ATTEST -
City Clerk
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